Digital Transformation in HR & The Role of Human Capital Management (HCM) Software

Table of Contents

  1. I. Executive Summary
  2. II. Defining Your Digital Transformation
  3. III. Three Keys to Digital Transformation
  4. IV. Why Automate?
  5. V. Digital Technology in Hiring
  6. VI. Empower Your Employees
  7. VII. Eliminate the Risk of Lagging
  8. VIII. Finding the Digital Solutions that Work for Your Company
  9. IX. About SBS Payroll

I. Executive Summary

From the introduction of artificial intelligence into the recruiting process to the practice of using video games to recruit and assess job applicants, the modern workplace is a landscape of high-tech innovation and change.

Keeping up can feel like a daunting effort – a race against the competition in which the finish line is moving forward faster than you are. Just when you think you’ve stepped into the future, the future has moved on. Even when you know exactly what you want to accomplish, it can be hard to keep up with the options for do so. Whatever you thought digital transformation was last week is this week’s old news.

None of that however, is likely to detour the professionals in the human resources department, where keeping a cool head while navigating a world of rapidly changing expectations is all in a day’s work.

And as luck would have it, HR professionals are not just temperamentally well-suited to tackle digital transformation – they are also in exactly the right spot to take advantage of some of the key benefits that digital transformation has to offer.

It’s no coincidence that most companies initiate efforts to digitally transform their business processes in the human resources department. There are a lot of good reasons to do so. With the dramatic growth of HR responsibilities has come an equally dramatic amount of information to be collected, routed, reported and archived. The potential benefits of automating much of that? Dramatic.

But how do small and mid-sized businesses modernize so many critical processes without dramatic disruption or dramatic expense? Naturally, it requires planning.

This whitepaper will introduce you to the options and benefits that flow from digitally transforming your company’s HR department and the role of human capital management (HCM) software, including processes for:

  • Reducing paper
  • Enabling digital recruiting
  • Streamlining employee onboarding
  • Empowering employees
  • Keeping up with workplace laws

II. Defining Your Digital Transformation

Digital transformation is the application of digital technology to automate business processes. It’s a process that can be different for every company. Depending on its objectives, resources and long-term goals, one company may approach the digital transformation process very differently than another.

Finding the approach that is right for your company can yield benefits that go beyond time savings to spark genuine innovation and creativity. Successful digital transformation is about more than just adopting new technology – it’s about developing the flexibility to adapt and keep pace with changing conditions. It’ll also help with recognizing and leveraging opportunities to reinvent the ways things get done.

“Digital transformation is about how technology changes the conditions under which business is done,’’ Boston University Professor Gerald C. Kane writes in the MIT Sloan Management Review. Kane explains that companies like Uber Technologies and Lyft grew out of changes in the technological infrastructure – not changes initiated by the company’s founders. Instead, these companies recognized the trend toward increasing reliance on mobile devices and provided new opportunities built around their use.

Digital transformation is never truly complete, Kane says, because it requires keeping on top of often rapidly changing conditions, technologies and the ways in which they affect your industry. Wait too long to adapt and your inefficiencies can start to compound themselves, and you risk falling further behind the competition.

With a wide array of options for every budget, there are few barriers to embracing the opportunities that automation can bring to human resources processes, such as recruiting, onboarding, benefits administration and payroll.

But that’s no reason to rush into anything. Do your homework and take advantage of what has worked well for those who have gone before. The next section explains three key things that can make a difference.

III. Three Keys to Digital Transformation

1. Start Small

One reason experts suggest that you start with your HR department: it is easier to transform one department than it is to take on the whole company. An added bonus is success in one department can drive a smoother adoption in the one that comes next, as employees will be eager to take advantage of demonstrated efficiencies.

2. Find the Right Software

You do not have to make a huge investment in new technology to make transformation work for your company. Look for software that can be easily scaled up as your needs change.

3. Find the Right Partner

Invest in a plan that has a reasonable life span, backed by the right company and adequate support. You don’t want to find yourself tied to a product that will be last generation in 18 months. You don’t want to partner with a provider who isn’t going to be there to help smooth the transition, the training and integration with your business processes.


IV. Why Automate?

Look no further than your filing cabinet. How much time do you spend searching through drawers to find the document you need? Or even searching through your computer? How much access do you really have to all of the information in your office? What could you do if all of that information was suddenly available at your fingertips, in a format that you could use to share it, combine it, analyze and compare it, or reconfigure it into a custom report? What could you do with the knowledge? What could you do with the time savings?

Real transformation is more than just the ability to scan documents into your computer and get rid of a filing cabinet or two. It’s about transforming the way you collect, access and use information.


V. Digital Technology in Hiring

Technology is rapidly changing the hiring process. Beyond online applications and employee records, digital technology has inspired some creative experimentation.

For the past year, Unilever PLC has been using mobile gaming to recruit new employees. It’s a practice designed to speed up recruitment, lower costs and promote diversity by stripping any opportunities for bias out of the process. Gaming skills can also help job hunters at L’Oreal and Microsoft, The Wall Street Journal reports.

Unilever has ditched recruiting on college campuses and turned to internet-based job searches, with a series of 12 short online games to determine skills such as concentration under pressure and short-term memory. The company then uses artificial-intelligence to filter applicants, Fox Business News reports. Goldman Sachs Group and Walmart’s Jet.com are using similar digital tools for job recruiting.

As a small to medium-size business owner you may not be ready to use video games to vet job candidates. But you can still use technology to broaden your reach and fine-tune your targeting to find the perfect fit for your company.

Human Capital Management (HCM) software can simplify the hiring process and get employees to work more quickly, while helping to ensure that you are in compliance with fair hiring laws.

HCM software can transfer employee data from the hiring portal to your main platform and trigger emails prompting the employee with links to various electronic forms that need to be completed. These forms can be sent out before the employee’s start date so that the first day of work is not spent bogged in forms.

Some HCM software includes access to a database of employment law, regulations and best practices, including an alert service to let you know when new rules are taking effect.

The right software can also automate processes like payroll, taxes, benefits enrollment, healthcare spending accounts, retirement plans and workplace policies, freeing up HR staff for higher level work. Auto-fill functions and docment management systems that automatically pull information from multiple sources save countless hours of data entry drudgery. Millennials and other digital natives entering the workforce have come expect such technology, while others will be happy not to have to fill out so much paperwork.

VI. Empower Your Employees

In many companies, traveling employees labor over manual expense reports. The reports are then handed over to a supervisor who signs off on the expenses before a check is issued.

With HCM software, your employees can enter their own expense, eliminating the paperwork and needless emails. Employees can update their own contact and banking information and request time off. They can also view and sign off on new employee handbooks, policies and procedures. This allows your human resource team to focus on more important things.

HCM software can perform multi-level, data-driven performance reviews, stay on top of regulatory requirements and increase employee engagement and participation. Rather than have several brands of software working together, the right system can combine everything into one easy-to-use platform.

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VII. Eliminate the Risk of Lagging

Don’t let the fear of change stop you from moving forward. An effectively managed digital transformation of your human resources functions can super-charge efficiency improvements throughout an entire company.

There are benefits everywhere you look, including enhanced productivity, improved access to information, reduced turnover and employee collaboration and morale. The ability to focus on higher level, more strategic tasks can yield additional benefits, as your employees find new and innovative ways to take advantage of dramatic efficiency gain

Lagging, on the other hand, can leave you struggling to keep up with competitors, and can put you in the position of having to manage your workforce through a rough adjustment to technological changes that come all at once.

VIII. Finding the Digital Solutions that Work for Your Company

A digital transformation in the HR department goes directly to the heart of your company’s mission and success, getting people to work sooner, more efficiently and with greater job satisfaction.

HCM software is a cost-effective and enabling technology that you should consider to achieve a digital transformation in HR, especially when implemented by an HR partner you can trust

IX. About SBS Payroll, Inc.

Serving small and mid-sized businesses throughout Southern California, SBS Payroll believes Payroll Done Right Means Doing More than Just Payroll. It’s why SBS offers a full suite of payroll, HR services and related support, including time and attendance, benefits administration and human capital management (HCM) software.

SBS is committed to providing the most responsive customer care by answering your questions on the first call, and with deep payroll and HR expertise so that you can focus on your core business. SBS is based in Santa Ana, CA, and is a wholly owned subsidiary of FBG Holdings, Inc. More: sbspayroll.com

Thank you for your interest in our whitepaper, Digital Transformation in HR & The Role of Human Capital Management (HCM) Software. We hope you find it a valuable resource.